Too many motorists are oblivious to the fact that their excess level is transferred to the courtesy car if they decide to temporarily switch their own insurance, says DCML, the courtesy car administration and day-rate insurance provider.
With excesses as high as £1,000, an increasing number are unwittingly exposed to unwanted repair bills when the loan car is damaged in their possession.
Annually, an estimated 650,000 motorists choose to ‘self-insure’ courtesy cars whilst theirs is being serviced or repaired, said DCML.
The concern should act as a reminder to service advisors of the need to be more proactive in highlighting the financial risks to customers as part of their duty of care, said the company.
Data from DCML shows that courtesy vehicles are involved in thousands of light or serious incidents annually.
Motorists are increasingly seeking higher excesses in an effort to keep premiums low, but research by insurer AXA shows that one in three admit they could not afford the excess if they had a crash.
The growing trend is rapidly becoming ‘a recipe for disaster’, according to Vince Powell, managing director of DCML.
Powell says: “Not only is the customer unwittingly exposed, but so too is the dealer.
“Worryingly, we are starting to see instances in which customers, with high excesses, have damaged the loan car and either don’t have the finances to cover the repairs or failed to realise that they would be liable in any way. Aside from the financial repercussions for the customer, it becomes a resource drain for the dealer/bodyshop as they deal with the issue.”
“Driving an unfamiliar car naturally raises the risk of an accident, so service advisors have a duty to advise customers about the potentially false economy of trying to further cut costs by self-insuring courtesy cars,” said Powell.
There is an average of 110,000 courtesy vehicles operated by dealers and bodyshops in the UK at any one time.